Since the beginning of the year the grocery price war has intensified, with all the major supermarkets investing millions into lowering prices on both a permanent and temporary basis. The focus, say the retailers, has been on the products shoppers buy all the time - the emphasis being on the cuts being genuine and actually delivering significant savings.
What that means in reality is a keen focus on branded goods in particular, both in terms of base price and promotions. On deals, brands have been at the forefront of all the main retailers’ strategies over the last few weeks. This has been reflected both in the supermarkets’ advertising and in-store activity.
According to the latest figures from Assosia, the ratio of offers shifted significantly in favour of branded goods during the four weeks to 15 February compared with the same period a year ago.
“While we all know branded suppliers are pushed hard for deeper discounts, own-label suppliers often work to even tighter margins to win the business in the first place, so are often not able to match the depths of discount that some of the branded manufacturers can, especially longer-term promotional activity,” explains Assosia MD Kay Staniland.
The significance of retailers pushing the message of cheaper branded goods is a clear fightback against the discounters, and certainly there has been evidence in the latest grocery share figures that the stellar growth of Aldi and Lidl is beginning to slow a little.
However, the fightback by the traditional supermarkets is not coming without a price. All the six biggest supermarkets, with the exception of The Co-operative Group, have increased the % savings they offer month on month, while Asda, Tesco and Waitrose were also giving away more per deal compared with a year ago.
The most dramatic shift in terms of the type of promotional activity can be seen at Tesco. As the retailer gets the ball rolling on its turnaround strategy, 48.5% of its deals used a simple ‘save’ mechanic compared with 34% during the same period a year ago. It has made the switch from x-for-y deals, which made up just 19.8% of its deals in the last four weeks compared with 32.3% during the same period last year.